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If all Companies in the industry will experience an inflation rate of 8.00% on the cost of goods sold and sales volume is expected to
If all Companies in the industry will experience an inflation rate of 8.00% on the cost of goods sold and sales volume is expected to shrink 3.00%, what is the expected percentage change in cost of goods sold on the income statement?
French notes that for the year just ended (2014), Archway's cost of goods sold was 30% of sales. To forecast Archway's income statement for 2015 , French assumes that all companies in the industry will experience an inflation rate of 8% on the cost of goods sold. Exhibit 4 shows French's forecasts relating to Archwan's price and volume changes After putting together income statement projections for Archway, French forecasts Archway's balance sheet items; he uses Archway's historical efficiency ratios to forecast the company's working capital accounts. the past five years. Wright discusses with French how the terminal value estimate is sensitive to key assumptions about the company's future prospects. Wright asks French: beyond your financial forecast horizon?" French notes that for the year just ended (2014), Archway's cost of goods sold was 30% of sales. To forecast Archway's income statement for 2015 , French assumes that all companies in the industry will experience an inflation rate of 8% on the cost of goods sold. Exhibit 4 shows French's forecasts relating to Archwan's price and volume changes After putting together income statement projections for Archway, French forecasts Archway's balance sheet items; he uses Archway's historical efficiency ratios to forecast the company's working capital accounts. the past five years. Wright discusses with French how the terminal value estimate is sensitive to key assumptions about the company's future prospects. Wright asks French: beyond your financial forecast horizonStep by Step Solution
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